Petroleo Brasileiro SA could raise around $28 billion by selling a big stake in a key offshore oil area if Congress passes a bill allowing such a move, Brazil's Mining and Energy Minister says.

RIO DE JANEIRO, June 27 (Reuters) - Brazil's state-controlled oil company Petroleo Brasileiro SA could raise around $28 billion by selling a big stake in a key offshore oil area if Congress passes a bill allowing such a move, Brazil's Mining and Energy Minister said on Wednesday.

The reserves, located in the offshore Santos basin, are part of the "transfer-of-rights" area that the government passed to Petrobras at a price that is still in dispute. Since 2014, negotiations to resolve the dispute have been contentious, with both parties claiming to be owed billions of dollars.

A basic text of a bill that would allow Petrobras to sell up to a 70 percent stake in the area was passed by the Lower House last week but requires further approvals there before it heads to the Senate.

"Once approved, the change should let Petrobras make around $28 billion," Mining and Energy Minister Wellington Moreira Franco said at a closed-door event on Wednesday, according to a copy of the speech seen by Reuters.

The transfer-of-rights area was granted to Petrobras in 2010 to extract 5 billion barrels of oil and gas for a price based on oil prices then. However, the contract stipulated that costs, among other things, would be reviewed after the area was declared commercially viable in 2014. That has led to years of sparring, as oil prices have fluctuated.

The bill winding its way through Congress would also allow the government to auction off oil and gas reserves in the area beyond the 5 billion barrels promised to Petrobras. The government has already said it wants to host the auction on Nov. 29.

However, Joao Vicente de Carvalho Vieira, Brazil's oil and natural gas minister, said the chance of Petrobras and the government reaching a deal this year over the value of the disputed area are slim.

Such a deal would be a key precursor for an auction of the remaining areas. Brazil, now Latin America's largest producer, has attracted top dollar from the world's largest oil companies in recent auctions, as they seek to lock in access to Brazil's pre-salt offshore oil play.

There, billions of barrels of oil are trapped under a thick layer of salt beneath the ocean floor.

WHAT DO YOU THINK?

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.